This post by Daneric40 has been promoted from StockTock Social.
Whenever I project wave patterns I always begin with the “ideal” structure in mind. I start with that template because sometimes it happens that way.
I have charted the rally likely to happen this next week to finish out corrective wave 2 of 5. I would suspect the 50DMA gets touched one last time. It currently resides at 877 SPX. Also the huge gap at 867-871 to get closed.
I project 28 hours of rally time. That would make the peak price around noon give or take 4 hours on Thursday the 22nd. Perhaps a Friday gap down begins wave 3 of 5 down. Again, just projecting the “ideal” and seeing how it plays.
Longer term I have charted the end of intermediate wave 5 and thus primary wave 1 down. Its interesting to note several items:
1.) According to EW guidelines, waves 1 and 5 should equate in price if wave 3 was extended. Since wave 3 was extended, the price projection of intermediate wave 5 down to new low projects to 625 SPX.
2.) Waves 1, 3, and 5 always try to connect on a channel line. Running a line connecting the lows of intermediate wave 1 and 3 and projecting it to the low of intermediate wave 5 could suggest a possible 625 SPX indeed.
Will those 2 things happen? Beats me, that is only the “idealized” way things could happen. So I must chart it and then we just start counting the waves and seeing how it all plays out.
I also show the upcoming Primary wave 2 rally after intermediate wave 5 plays out. This rally will be a golden opportunity to go long and make a lot of money if you have no fear in buying the market after it seemingly is plunging to zero….hehe.
I make one point about Primary wave 2 rally that I expect to play out: The 200DMA should probably be touched and even rallied above for a bit. Other than that, It will be proclaimed to be the start of a new bull (which it will not be). Just another bear rally, but a largest one in terms of price and time compared to anything else. And if the market does head to 625 and rally back above 900 to 1000, that would be a large move indeed.
Great work! Keep it coming
Daneric, your chart is extremely well done. I hope all readers look at it closely. I especially appreciate the potential impact of the financials that you show on the B wave….above and beyond the call of analysis.
This kind of charting and opinion sharing is so appreciated!. Learning from technical analysis has like this has kept me ahead of the news.
Thank you,.
I’d caution readers to be aware that any projection of time and price pattern is speculation, and although Daneric40 has good justification of his primary count, there are numerous other counts that differ significantly and can be justified. It would not be wise to bet the farm on any one count as the market has a nasty way of doing the exact opposite of what we humans project “should” happen.
It is not unlike weather forecasters who are so sure of what will happen in the next few days and then their forecast falls apart. Everyone tries their best, but it’s like always betting only on the horse with the best odds at the racetrack – it works out far less than half the time.
Absolutely, as is everything out there, they’re the opinions and thoughts of an individual. Daneric even states “Will those 2 things happen? Beats me, that is only the “idealized” way things could happen. So I must chart it and then we just start counting the waves and seeing how it all plays out.”
My problem is I read too many news items, opinions, blogs and it clouds my own judgement and assessment. I did better when I just went by my gut instinct.
ive covered my shorts way too early way too many times by reading way too much information. however, it sometimes has saved me from being massively squeezed too. hard to say if we would do better without all these differing opinions or not. only if we kept amazing records with trading way 1…my way… and trading way 2.. my way+excessive information. for this reason most of my portfolio short specific equities. it is a longer term play that does not consider exactly when the market will move higher or lower. less risk with a solid return.
Daneric, must say you are a true auto-didactic student of the market- learning very quickly and making us very happy for this hard work you have been doing.
Thank you.
And for those that want a 3rd choice/option, if you’re not already familiar with Molecool, his weekend update has 3 scenarios to keep eyes on. http://evilspeculator.com/
Daneric
I am a student your work.
Question : Is wave 4 at complete at 943.85? The arguments for / against would clear some of my current EW confusion.